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JAKE TAPPER, CNN ANCHOR: If you're one of the people who failed to take candidate Donald Trump literally, I present to you today.

THE LEAD starts right now.

Breaking news: President Trump taking a combative turn in U.S. policy against Iran, threatening to walk away from the nuclear deal that President Obama negotiated, just as he promised he would do before he got elected.

Even fewer Puerto Ricans have power today than did yesterday, as House Speaker Paul Ryan is in Puerto Rico to look at the devastation.

So, how is that recovery going now, Mr. President?

Plus, North Korea warning that the hands on the trigger to attack the U.S., as CNN goes undercover and finds out how Kim Jong-un's seafood industry is staying alive in China, despite sanctions intended to cripple it.

Good afternoon, everyone. I'm Jake Tapper. Welcome to THE LEAD.

President Trump today labeled a branch of Iran's armed forces, specifically the Islamic Revolutionary Guard Corps, a terrorist group. He did so through the Treasury Department. And while he did not tear up the Iran nuclear deal negotiated under President Obama, he did say that the Islamic republic was not living up to the spirit of the agreement, and he announced that he wanted Congress to establish trigger points that could provoke the U.S. to walk away eventually from the deal.

This was one of two steps that the president took today to solidify his place as dismantler in chief of the Obama legacy.

The other move came with his decision to refuse to pay almost $7 billion in insurance subsidies to insurance companies who participate in the Obamacare exchanges. That is a move that will severely undermine the health care law and is expected some premiums to spike next year by up to 20 percent, specifically for over lower-income Americans.

Scrapping both Obamacare and the Iran deal were campaign promises President Trump made.

CNN Washington correspondent Ryan Nobles starts us off today from the White House.

(BEGIN VIDEOTAPE)

RYAN NOBLES, CNN CORRESPONDENT (voice-over): Tonight, President Trump is trying to make good on major campaign promises with two key policy moves that could have dramatic consequences.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I am announcing a new strategy to address the full range of Iran's destructive actions.

NOBLES: Mr. Trump unveiling a new approach to the nuclear agreement with Iran, decertifying the deal and forcing Congress to come up with a plan within 60 days.

TRUMP: We will not continue down a path whose predictable conclusion is more violence, more terror and the very real threat of Iran's nuclear breakout.

NOBLES: In addition to forcing Congress to make the deal tougher, the president promised new economic sanctions and sanctions against Iran's Revolutionary Guard. He warned that if he doesn't like the congressional plan, he is prepared to pull out of the deal completely.

TRUMP: In the event we are not able to reach a solution working with Congress and our allies, then the agreement will be terminated.

NOBLES: This warning matches the president's strong condemnation of the Iran deal on the campaign trail.

TRUMP: The Iran deal, forget about deals between countries. This is one of the dumbest contracts I have seen of any kind.

NOBLES: But pulling out completely could potentially isolate the U.S. from key allies that support the Iran agreement. It also stands in contrast to the recommendations of the president's key advisers, like Defense Secretary James Mattis, who argued the U.S. is better off in the deal.

JAMES MATTIS, U.S. SECRETARY OF DEFENSE: Absent indications to the contrary, it is something the president should consider staying with.

NOBLES: And it comes despite the fact that the administration concedes Iran has lived up to their end of the bargain.

REX TILLERSON, U.S. SECRETARY OF STATE: My view on the nuclear deal is, they are in technical compliance of the nuclear arrangement.

NOBLES: While the move may make U.S. allies and diplomats nervous, it will likely be welcomed by the president's supporters, enthusiastically cheered during his speech at the conservative Values Voter Summit.

In addition to pointing to his plan with Iran as an example of his attempt to make good on campaign promises, the president bragged about his decision to withhold cost-sharing reduction payments to insurance companies as a first step in repealing and replacing Obamacare.

Republicans have argued to some time that the payments to insurance companies were unlawful. Today, Mr. Trump argued that the payments were just making insurance companies rich.

TRUMP: As far as the subsidy is concerned, I don't want to make the insurance companies rich.

NOBLES: But Democrats contend that the White House is purposefully attempting to dismantle Obamacare in an attempt to force Congress to take action, a move that could result in many Americans paying higher insurance rates.

Democratic Leaders Nancy Pelosi and Chuck Schumer called the move -- quote -- "a spiteful act of vast pointless sabotage leveled at working families and the middle class in every corner of America."

The president argues he's just following through on his campaign pledge.

TRUMP: In the last 10 months, we have followed through on one promise after another.

(END VIDEOTAPE)

NOBLES: And a key theme of the Trump campaign was an implied promise that he would work to systematically undo the work of the Obama administration.

And with these big moves on Iran and health care, he's taking direct aim at two of Barack Obama's most significant achievements -- Jake.

[16:05:03]

TAPPER: All right, Ryan Nobles at the White House for us, thank you so much.

Let's dive a little deeper into the two big decisions from the White House today.

CNN's Christine Romans will take a look at who the Obamacare subsidies truly impact.

But first let's start with CNN chief national security correspondent Jim Sciutto, who has taken a dive in the president's decision not to recertify the Iran deal.

So, for people who might be confused, is the U.S. in or out of the Iran deal?

JIM SCIUTTO, CNN CHIEF NATIONAL SECURITY CORRESPONDENT: Today, it's in the Iran deal. For the next 60 days, it's in the Iran deal. But the president today laid out conditions that he said if Congress doesn't change this deal, in effect, in the next 60 days -- it's a legislative window prescribed by law -- then he will -- and he said it in so many words -- then the agreement will be terminated.

Whether the president follows through on that promise at that point, we will see, but that's what the president laid out today. And in making his case, again, he said again in so many words that Iran has multiple violations of the agreement, that in contrast to all of his senior advisers, his defense secretary, his secretary of state, the intelligence agencies, who say that as the deal was negotiated and as it relates only to Iran's nuclear program, that Iran is, in fact, in compliance.

The president said the opposite of that today. One final point, and this should be clear, that the U.S. is alone on this going forward with all of the parties to this nuclear agreement. Certainly Russia and China don't agree, but also America's closest European allies. In fact, they released a statement today following the president's comments, this from the U.K., France and Germany, close NATO allies.

They said the following: "We stand committed to the JCPOA" -- that's as this deal is known -- "and its full implementation by all sides," presumably including the USA. "Preserving the JCPOA is in our shared national security interests."

Couldn't be clearer there, Jake, that our own allies look at this and say we're going to stay in the deal. And the fact is staying in that deal serves our national security interests, very different message to that you heard from the president.

TAPPER: All right. Jim Sciutto, thank you so much.

Let's go now to our money lead for a closer look at how the president's decision not to pay these Obamacare subsidies might impact you.

So who are we talking about here? Nearly six million low-income Americans, individuals who earn less than $30,000 a year and families earning less than 61 grand. Insurers rely on these cost-sharing subsidies to help pay for their lower deductibles. It doesn't affect premiums, but it makes a huge difference for these enrollees.

Let me give you an example here. Take a traditional silver plan. For those just above the poverty line, the subsidy lowers the average deductible to $255 a year. Without it, it's $3,600. That's why these Americans could see huge increases next year.

Now, the president has threatened to stop payments for months and that's caused many insurers to already hike rates next year, most by more than 20 percent. That's already happening. Some major players even dropped out entirely.

But insurers that didn't raise -- didn't price in the loss of these subsidies, they can sue, Jake, or they can raise rates. That's a new problem for Obamacare, less than three weeks, Jake, before open enrollment.

TAPPER: All right. Christine Romans, thank you so much.

What message does President Trump's decision on Iran send to North Korea? We will talk to a Republican member of the Senate Armed Services Committee about all that's going on today next.

(COMMERCIAL BREAK)

[16:12:34]

TAPPER: We're back with our politics lead.

President Trump announcing today that he will not certify the Iran nuclear deal, arguing it is not in America's national security interests. The move does not permanently remove the U.S. from the 2015 pact, but it does give Congress the power to change the terms of the agreement.

Joining me now is Republican Senator Dan Sullivan of Alaska. He served in the Middle East as a Marine. He worked on Iran issues as an assistant secretary of state under Condoleezza Rice. And he's currently on the Senate Armed Services Committee.

Senator, thanks for joining us. We appreciate it.

SEN. DAN SULLIVAN (R), ALASKA: Good to be here, Jake. Thanks for having me.

TAPPER: So the president has essentially kicked this to Congress.

SULLIVAN: Yes.

TAPPER: Is Iran doing anything right now that in your view would prompt you to want to reimpose sanctions that had been suspended under the nuclear deal, thus ending the agreement?

SULLIVAN: Yes, I do.

I believe, and I have followed this very closely, that almost since the signing of the agreement before the ink was dry, both the letter and spirit of the deal have been violated.

You know, you look at the conventional weapons sales that are part of the annex of the U.N. Security Council 2231, the ballistic missiles testing, which, again, is a part of it. And, you know, Jake, the broader issue is this deal was supposed to moderate Iranian behavior and it certainly hasn't.

It has emboldened them. They still are the number one sponsor of state terrorism in the world. So I support what the president's doing, which is trying to broaden our strategy and not make our -- the U.S. strategy with regard to Iran solely defined by the nuclear deal, and I think that was a flaw of the last administration's policy. TAPPER: So you disagree with Secretary of State Tillerson and

Secretary of Defense Mattis, both of whom say that Iran is in technical compliance with the deal?

SULLIVAN: So, they're saying technical.

You had General Dunford say, you know, no material breach. And, look, I have a lot of respect for both of -- all of them. I think the president's put together a strong national security team. But when you look at the implementing U.N. Security Council Resolution 2231, it focuses not just on the deal, but on no ballistic missile testing.

They have clearly violated that. It focuses on no travel of certain individuals like General Suleimani, who traveled to Syria, traveled to Russia. It focuses on no sale of conventional weapons, which the Iranians are talking with the Russians right now of a huge multibillion conventional weapons sale.

[16:15:03] So, to me, it's both the spirit and technical aspect. So, yes, do I disagree with them.

TAPPER: So --

SULLIVAN: And especially on the broader spirit of this agreement, which is why the president, I think, has chosen the right course to broaden our focus with regard to Iranian strategy and make it much more about their broader malign activities in the Middle East, not so much focus solely on the deal.

TAPPER: But if -- so you're saying basically if provisions came before you in the Senate to create these trigger points that the president wants so that the U.S. would leave the deal if for instance Iran continued ballistic missile launches, then you're saying you would vote for that, even if that meant that the U.S. -- that Iran then said, well, you're not -- you're not in compliance with our agreement and that would be the end of that?

SULLIVAN: Look, what I've been encouraging the White House to do is not pull out of the agreement, but to vigorously enforce the agreement and then broaden our strategy, and if we believe that there are activities that the Iranians are taking -- for example, they're clearly violating the U.N. Security Council resolutions relating to ballistic missile testing. That's a fact. And I think we should look at what President Obama and Secretary Kerry said we should do, we should look at snapback sanctions with regard to activities, malign activities with regard to Iran.

So I believe that broadening the aperture of what they're doing, and, remember, you know, we always think that, you know, because Secretary Kerry spent so much time with the Iranians that they're some kind of normal country. They have a history of cheating on these kinds of deals. But, Jake, they're still the number one sponsor of state terrorism in the world and their activities in that regard have only increased --

TAPPER: Right. SULLIVAN: -- since the deals.

TAPPER: I don't disagree with that, but that wasn't part of the agreement, as you know. The agreement was about nuclear proliferation within Iran, it wasn't about activities related to terrorism. Maybe it should have been.

But I guess the question is, the deal that they have right now -- I feel like I'm hearing two different messages from you. One is what we heard from the House Foreign Relations chairman, Ed Royce, keep the deal, enforce the hell out of it, and the other one is you seem to also be saying at the same time that the Iranians are not in compliance with the deal and, thus, you're willing to create these trigger points that might cause the U.S. to impose more sanctions, thus ending the deal. I know I'm confused here. Clear it up for me.

SULLIVAN: I don't think those are inconsistent at all. I agree with the Chairman Ed Royce. We can look -- we can lead like we've done before. Remember, the whole way this deal came together was U.S. leadership with other countries economically isolating Iran. We can vigorously enforced the deal.

But I think right now that the Iranians are not in compliance and we have the president saying we should look at vigorously -- vigorously enforcing, and if they don't come into compliance, do what John Kerry and Barack Obama said we would do, is issue and undertake snapback sanctions which would prevent them from getting a nuclear weapon, but also counter there malign activities which are, you know, undermining U.S. interests and those of our allies throughout the Middle East.

TAPPER: All right. Senator Dan Sullivan, Republican of Alaska. Welcome to our show. Thanks for coming on. Hope to have you on again soon.

SULLIVAN: Great. Thanks, Jake.

TAPPER: The deadliest series of wildfires in California's history and firefighters finally starting to get the upper hand, but is the weather about to change all of that? We're going to go live to northern California's wine country next.

Stay with us.

(COMMERCIAL BREAK)

[16:22:44] TAPPER: Welcome back.

In our national lead, it is now the deadliest fire siege in the history of the state of California. Moments ago, the death toll went up by one more, 32 people have now been killed as wildfires scorch an area larger than New York City. Firefighters are working around the clock to try to handle the flames, but a forecast of strong winds could wipe out their progress.

Joining me now is CNN national correspondent Miguel Marquez. He's on the ground in California. Miguel, how are first responders faring?

MIGUEL MARQUEZ, CNN NATIONAL CORRESPONDENT: They're getting through it, but it's very, very difficult work. They are tired. Some of them are on 24-hour shifts. Some of them have never gone home since this thing started.

This is still the brunt of the fire, the main line of the fire. These are the mountains just west of Napa, California. If that wind, as suspected, comes back this way, it would blow it right into Napa. That is what they are trying to stop, but it is brutal work.

(BEGIN VIDEOTAPE)

MARQUEZ (voice-over): Firefighters battling from the ground and the air. The weather, for now, cooperating. Crews finally getting the upper hand on fires that killed dozens, leveled entire neighborhoods and burned through nearly a quarter of a million acres.

UNIDENTIFIED MALE: Today, the weather is Cooperating, but we are going to go back into red flag again, and that's going to be an issue that we will have to keep a close eye with low humidities and potentially wind for the next couple of day.

MARQUEZ: The magnitude of the loss only grows. The Petaluma home of "Peanuts" creator Charles Schultz destroyed, along with all his personal memorabilia. His widow, evacuated and survived.

The fire spared nothing, even a Santa Rosa fire station gutted. Crews now doubling efforts to cut lines, burn out brush and undergrowth. And prepare for a hot, dry wind in the days ahead.

(END VIDEOTAPE)

MARQUEZ: And this is what you are looking at, fires from Northern California, all the way down south, just dozens of fires burning. They are starting to get some containment lines around many of those fires, but they are still a long way off. One wind at just the right angle, just the right time, just the right speed could bring this all back into towns and neighborhoods and wipe them out.

[16:25:07] Amazing stories of survival here as well. Reports of people in swimming pools for up to six hours as the fire raged around them, survived -- Jake.

TAPPER: Unbelievable. Miguel Marquez, thank you so much.

President Trump seeming to do a 180 on Puerto Rico yet again, going from threatening to remove first responders fairly soon to saying he will always be with the people of Puerto Rico. What do the people on the island have to say what seemed like mixed messages? Stick around.

(COMMERCIAL BREAK)

TAPPER: More in our national lead now. Moments ago, the president did it again. He heralded his administration's relief efforts in Puerto Rico as great, despite the low recovery efforts and the pleas for help from the island that CNN reporters are witnessing firsthand on the ground.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We're doing a great job in Puerto Rico. Puerto Rico has to get construction going. We are helping them with construction, but most important for Puerto Rico is their electric grids are essentially gone. Now, they were gone before these hurricanes.

(END VIDEO CLIP)

TAPPER: Fact check, though Puerto Rico's electric grid had its issues before the hurricane, it is false to say their electric plants were gone before the hurricane.